• Filing Date: 2016-07-15
  • Form Type: 10-Q
  • Description: Quarterly report
v3.5.0.2
Related Party Transactions
3 Months Ended
May 31, 2016
Notes to Financial Statements  
Note 5. Related Party Transactions

Advances from Major Shareholder

 

During the three months ended May 31, 2016 Mr. Daniel Solomita, the Company's major stockholder and CEO, or companies controlled by him, made advances to the Company of $18,586. The amounts due to these entities as of May 31, 2016 and February 29, 2016 were $510,773 and $492,128, respectively. The advances are unsecured, non-interest bearing with no formal terms of repayment.

 

Employment Agreement and Accrued Compensation due Major Shareholder

 

The Company entered into employment agreement with Daniel Solomita, the Company's President and Chief Executive Officer for an indefinite term. During the term, officer shall receive monthly salary of $15,000. Compensation expense under this agreement amounted to $45,000 during the three months ended May 31, 2016 and 2015, respectively. As of May 31, 2016 and 2015, accrued compensation of $255,000 and $75,000, respectively, was due to Mr. Solomita.

 

In addition, the Company agreed to issue the officer 4 million shares of the Company's common stock, in tranches of one million shares each, if certain milestones were met. The bonus of 4,000,000 shares of common stock is payable to Mr. Solomita as follows:

 

  (i) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company's securities are listed on an exchange or the OTCQX tier of the OTC Markets;
     
  (ii) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company executes a contract for a minimum quantity of 25,000 M/T of PTA/EG or a PET;
     
  (iii) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company's first fill-scale production facility is in commercial operation; and
     
  (iv) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company's second full-scale production facility is in commercial operation.

 

The milestones had not been met as of May 31, 2016.

 

On February 15, 2016, the Company and Mr. Solomita entered into an Amendment No. 1 to Employment Agreement (the "Amendment No. 1"), which amends the Employment Agreement. Amendment No. 1 provides that the Company shall issue Mr. Solomita one share of the Company's Series A Preferred Stock for consideration of Mr. Solomita agreeing not to terminate his employment with the Company for a period of five years from the date of Amendment No. 1.